Shoppers splash out more on hotels and restaurants – but not clothing

UPBEAT British consumers are splashing out more on luxuries like eating out and taking trips away, according to Visa's spending index published today.

Household spending increased 1.1 per cent in the year to March, and 1.3 per cent on the month.

Spending on bars, hotels and restaurants led the way, soaring by 7.1 per cent on the year, with recreation and culture next, up two per cent.

By contrast food and beverage spending only crept up by 0.2 per cent, and spending on clothes and shoes dropped by a total of 4.8 per cent.

Economist Annabel Fiddes from information services group Markit said that, according to estimates, strong growth in total consumer spending adds to evidence that the UK economy is on track for an expansion of GDP of around 0.7 per cent in the first quarter.

"Furthermore, a tightening labour market and weaker inflationary pressures have contributed to a renewed increase in real wages, suggesting expenditure trends will remain positive as we head into the second quarter," she added.